Cargotec bids farewell to MacGregor in a $507M deal, casts net toward future

Helsinki-headquartered Cargotec Corporation has made the decision to let go of its MacGregor business area to funds managed by Luxembourg’s mid-market sector-specialist Triton for an enterprise value of €480 million (circa $507 million) to support the growth of the corporation’s load-handling equipment manufacturer Hiab.

As disclosed, the deal needs regulators’ approval and discussion with the works council in the applicable regions. The transaction is expected to be finalized by July 1, 2025, at the latest, the company added.

The sale of the business follows Cargotec’s Board of Directors’ decision two years ago that MacGregor would no longer be part of the corporation’s portfolio. Given the time and the insecurities brought on by the pandemic, together with other factors, the entity then postponed the divestment until May by which time MacGregor’s performance as well as market conditions had allegedly improved.

Further than this, Cargotec’s transformation project also included listing Finnish port automation solutions provider Kalmar as a separate company and preparing Hiab for a “standalone future” since, according to a statement from Cargotec, Hiab would be the ‘only business left in the corporation’.

“The agreement to sell MacGregor represents the last major milestone in our project to unlock shareholder value by separating Cargotec’s businesses into standalone companies. The two-year project has progressed according to our plan and is now in its final stages. The proceeds from the Transaction will boost Hiab’s ambitious growth plans through innovation and M&A,” Casimir Lindholm, Cargotec’s CEO, highlighted.

As explained, Cargotec projects a tax-exempt loss of circa €200 million on the transition. However, the loss will reportedly be recorded as a goodwill impairment in items affecting comparability as part of discontinued operations. The estimate is that the total costs to separate MacGregor, in addition to the impairment, could go up to just shy of €25 million.

As the agreement to sell MacGregor has been signed, Cargotec’s Board of Directors is planning on drafting a proposal to change the company’s name to Hiab.

Simultaneously, the current president and CEO, Lindholm, has revealed his decision to step down, after which the current President of Hiab Scott Phillips would be appointed as CEO of the soon-to-be-renamed Cargotec, the corporation has explained. Current Cargotec CFO Mikko Puolakka would reportedly continue as CFO of the standalone Hiab.

These changes are projected to take place on April 1, 2025. 

To remind, within the context of Cargotec’s expansion and transformation endeavors, in 2020, the Finnish company announced plans to merge with compatriot engineering major Konecranes whereby it had been envisioned that respective shareholders would each own approximately 50 percent of the shares and votes of the future company.

However, despite receiving a green light from some authorities, with the European Commission granting its own nod of approval in February 2022, the merger did not go ahead as it stumbled upon hurdles.

Specifically, the Competition & Market Authority of the United Kingdom (CMA) provisionally found that the proposed merger raised competition concerns in the supply of container handling equipment.

Following that decision, in March 2022, the two entities decided to withdraw from the $5 billion business combination.